Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Evolving Systems (Nasdaq: EVOL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 49.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EVOL's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EVOL has a quick ratio of 2.27, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for EVOLVING SYSTEMS INC is currently very high, coming in at 71.30%. It has increased significantly from the same period last year. Along with this, the net profit margin of 32.00% significantly outperformed against the industry average.
- EVOLVING SYSTEMS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EVOLVING SYSTEMS INC reported poor results of -$0.10 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus -$0.10).
-- Written by a member of TheStreet Ratings Staff